Manila: The 20 percent tariff recently announced by the United States is expected to have a limited impact on the overall economic growth of the Philippines, as the country's economy is less reliant on exports, according to an economist. Rizal Commercial Banking Corporation's chief economist, Michael Ricafort, emphasized that the Philippine economy is relatively resilient and primarily consumer-driven, distinguishing it from major ASEAN economies that heavily depend on merchandise exports.

According to Philippines News Agency, Ricafort stated in a Viber message that the local economy is predominantly domestically driven, with consumer spending comprising about 75 percent of the economy. In a letter dated July 9 to President Ferdinand R. Marcos Jr., US President Donald Trump announced that starting August 1, 2025, the US will raise tariffs on Philippine goods to 20 percent, a rise from the previously announced 17 percent rate.

Ricafort mentioned that while this increase is expected to slow down exports, the effect on the Philippine GDP will be minimal. He explained that Philippine exports are considerably smaller compared to other Asian countries. "Philippine merchandise exports are 3-5 times lower compared to major ASEAN countries on a yearly basis," Ricafort highlighted.

He further elaborated that the impact of the US reciprocal tariffs would be more manageable for the Philippines compared to other Asian countries, given the smaller scale of Philippine exports. The US has announced higher tariffs for various other countries, with the reciprocal tariff for the Philippines set at 20 percent, significantly lower than the 25 percent tariff for Japan, South Korea, and Malaysia, 30 percent for China, 32 percent for Indonesia, 36 percent for Thailand and Cambodia, and 40 percent for Laos and Myanmar.